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TMI Blog1973 (4) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner, and the second question in the affirmative and in favour of the assessee - - - - - Dated:- 4-4-1973 - Judge(s) : R. L. GULATI., C. S. P. SINGH. JUDGMENT The judgment of the court was delivered by C. S. P. SINGH J.-The Income-tax Appellate Tribunal, Allahabad, has under section 256(1) of the Income-tax Act, 1961, referred the following two questions for our opinion: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the word ' month ' occurring in section 271(1)(a)(i) referred to English calendar month? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the penalty should be calculated with reference to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after filed, one by the department and the other by the assessee. The appeal filed by the department was dismissed inasmuch as the Tribunal took the view that the appeal had been filed by the department in the penalty matter only as it has not accepted the decision of the Appellate Assistant Commissioner in the quantum appeal, and the department's appeal to the Tribunal in that quantum matter had already been dismissed. In respect of two questions which have been referred to us, it was urged by the assessee that inasmuch as the word " month " had not been defined in the Act, the meaning given to that word in section 3(35) of the General Clauses Act should be adopted, and the word " month " should be taken to be the English calendar month, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , a sum equal to two per cent. of the tax for every month during which the default continued, but not exceeding in the aggregate fifty per cent. of the tax. " We propose to answer the second question first. This question now stands concluded by the decision of the Supreme Court in Civil Appeal No. 497 of 1970 decided on January 29, 1973 (Commissioner of Income-tax v. Vegetable Products Ltd. ), wherein it has been held that the penalty leviable has to be calculated after deducting amounts of tax already paid, and not with reference to the gross tax assessed. Coming now to the first question, section 271(1)(a)(i) of the Act is a penal provision, and in the event of the default contemplated by this section, an assessee becomes liable to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination of the scheme and purpose of this section, we are of the view that the word "month" as occurring in this sub-section must be taken to mean a period of thirty days. This provision was enacted for the purpose of imposing a penalty on an assessee who had not filed his return during the prescribed time, and was enacted to serve as a deterrent for such lapses. The penalty is imposable for every month during which the default continues. If the meaning ascribed to this word in the General Clauses Act is adopted, it may in some cases lead to a defaulting assessee escaping penalty altogether, in spite of default. To take an illustration : Let us assume that time is given to an assessee up to the 30th of January in a particular year for fili ..... X X X X Extracts X X X X X X X X Extracts X X X X
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